SRP for commercial rice proposed

April 20, 2018

The Department of Trade and Industry (DTI) is proposing to set a suggested retail price (SRP) on commercial rice in times when stocks of affordable rice are low.

Ramon Lopez, DTI secretary, told reporters he will discuss with the Department of Agriculture and the National Food Authority (NFA) Council the plan to offer at P39 per kilogram (kg) well-milled commercial rice that would be available in all retail stores in the country.

Lopez said this would be another cheap variant, a basic rice variety, to be sold aside from the NFA rice being sold at either P27 or P32 per kg.

Lopez said a change is needed in rice policy after recent developments when NFA ran out of cheap rice.

The government currently has no mechanism to intervene on rice prices, except during a state of calamity when it can only freeze prices.

“It’s a policy proposal that we have to look into and discuss with the stakeholders, the farmers, traders,” Lopez said.

Since the type of rice to be pegged with the SRP will be very basic, it could come from either local or imports.

The trigger for imposing the SRP and length of time at which it will be in effect will have to be determined as well.

Approval of the proposal will come from the NFA Council, Lopez said.

Lopez said the DTI and DA would also now jointly monitor the supply and prices of rice, which used to be under the jurisdiction solely of DA.

According to Lopez, some 250,000 metric tons of rice will be delivered end of May to beef up stocks.

Rice producing provinces have provided 100,000 bags of rice now being sold at P39 per kg.

“ We will look into how to validate (the) classification (of rie) since at present, anybody can just claim the type of rice he is selling. There is no uniformity in the pricing of rice as any retail market can just put a rice tag without official validation ,” Piñol told reporters at a briefing in Manila.

He said the agency will form a technical working group to reform its rice distribution system to avoid a repeat of the depletion of NFA rice stocks. This includes a tracing system to improve accountability of supplies.

Piñol said the government will strengthen the role NFA other than just being a rice distributor.

“Farmers and fishers are looking for foreign buyers of their goods on their own. NFA is recognized by the World Trade Organization as a trading agency so there is no problem for them to perform that function. India, China and Vietnam have their state trading agencies so that their farmers would be focused on producing the goods while the government finds a market for them,” Piñol said.

The DA said it would be able to improve NFA’s buffer stock to 60 days by the first quarter of 2020.

At present, the NFA is mandated to maintain a rice buffer stock good to last for 15 days at any given time and for 30 days at the onset of the lean months, based on the daily consumption requirement of 32,150 metric tons (MT) or 643,000 bags of rice.

Currently, NFA’s warehouses are only capable of 22-days worth of stocks which will force the agency to rent more facilities.

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